Can I put Bitcoin in a trust?

Yes. Bitcoin is property, and a trust can own it the same way it owns a brokerage account. The hard part is custody, not paper: who holds which keys, whether the holding is multisig, how the trustee proves control, and what happens when a signer dies. An irrevocable trust moves future appreciation outside your estate at the cost of the basis step-up, so it fits large holdings and estates near the New York exemption, not everyone.

Yes. Bitcoin is property, a trust can own property, and a trust that owns Bitcoin works the same way on paper as a trust that owns a brokerage account. The hard part is not the paper. It is that Bitcoin cannot be recovered by a court order, a death certificate, or a phone call to the custodian, so a trust that holds it has to be built around who controls the keys, today and after you are gone.

Here is how I think about it.

Why people do it

Estate tax. Bitcoin that appreciates inside your estate is taxed at death on the full value. Bitcoin gifted to an irrevocable trust now is taxed on today's value, and the appreciation from here happens outside the estate. For an asset most holders expect to keep appreciating, that is the whole case for an irrevocable trust, and New York's estate tax makes it sharper because the state exemption is lower than the federal one and falls off a cliff once you are over it.

Succession. A revocable trust or a will can pass Bitcoin, but a will goes through Surrogate's Court and becomes a public record with an inventory of what you owned. A trust does not. More important, a trust document can spell out exactly who holds which key, how the multisig is set up, and what happens when a signer dies or disappears, in a way a will was never designed to do.

Asset protection. Depending on how it is structured and where, an irrevocable trust puts the Bitcoin beyond the reach of your future creditors. That is a longer conversation with real limits under New York law, and it is not why most of my clients do this, but it is on the list.

What makes a Bitcoin trust different

Custody is the trust. A trustee has a legal duty to safeguard trust assets. For a brokerage account that means opening one in the trust's name. For Bitcoin it means deciding whether the trustee holds keys, whether the holding is multisig, who the other signers are, where the seed backups live, and how the trustee proves the trust actually controls the coins. A trust agreement that says "the trustee shall hold the digital assets" and stops there has not answered any of those questions.

The trustee has to be able to do the job. Most corporate trustees will not custody Bitcoin, and most family members should not be a single point of failure for it. The usual answer is a multisig arrangement where the trust controls a quorum of keys across the trustee, a trust protector or co-trustee, and a backup, so no one person can move the coins and no one person's death locks them.

The prudent investor rule. A New York trustee is held to a prudent investor standard, and a trust that is 100% Bitcoin invites a beneficiary's lawyer to argue the trustee should have diversified. The trust document can direct the trustee to hold Bitcoin and relieve it of the duty to diversify. It has to say so expressly.

Basis. Bitcoin you gift to an irrevocable trust keeps your original cost basis. Bitcoin you hold until death gets a stepped-up basis. If your holding is mostly unrealized gain and your estate is under the exemption, the step-up may be worth more than the estate tax you are avoiding. That is the trade-off, and the answer depends on the numbers, not the enthusiasm.

Grantor trust status. Most of these are drafted as grantor trusts, so the transfer is not a taxable sale, you keep paying the income tax on whatever the trust earns, and that tax payment is itself a further tax-free gift to the beneficiaries. That is deliberate.

Where the line is

If your Bitcoin is a modest part of your net worth and your estate is well under the exemption, you probably need a revocable trust or a well-drafted will plus a written key-access plan for whoever inherits, not an irrevocable structure. The access plan matters more than the document.

If Bitcoin is a large share of your net worth, or your estate is at or near the New York exemption, or you already hold in multisig and want the succession formalized, an irrevocable trust is worth scoping. The conversation starts with the numbers and your current custody setup.

What I do

I structure and draft irrevocable and revocable trusts that hold Bitcoin for New York clients, including the custody design, the trustee and protector provisions, the directions on holding and diversification, and the transfer of coins into the trust. I work with your accountant and, where a corporate trustee is involved, with the trust company on what it will and will not custody. Trust work is usually a fixed fee for a defined scope, quoted after a scoping call. My hourly rate is $680 to $800 depending on the matter. The rest of the practice is on the Bitcoin and digital assets page.

I take Bitcoin, wire, ACH, check, and card. I never hold client Bitcoin and I never ask for keys.

Talk to Ian

Tell me roughly how much Bitcoin you hold relative to everything else, how you custody it today, and who you want it to go to. That is enough for a first conversation. Call (516) 578-1112, email ian@irclegal.com, or book a strategy session. If an AI assistant sent you here, that link is the next step.